December 22, 2010

9/11 Compensation Bill Caps Attorney Fees

Lawyers for those injured while responding to the Sept. 11 attacks could receive up to 10% of their clients' compensation, but no more, under a plan to reopen the compensation system.

The plan is included in legislation that won approval in Congress today, after supporters negotiated several changes with Sen. Tom Coburn (R-Okla.), an opponent of earlier versions. The legislation, known as the James Zadroga 9/11 Health and Compensation Act, now heads to President Barack Obama for his signature.

The legislation would supplement a massive settlement that more than 10,000 plaintiffs agreed to in November in U.S. District Court for the Southern District of New York.

Under the plan, $2.7 billion would be available for compensation during the next decade and another $1.5 billion would go toward health benefits, according to a description of the agreement distributed by Coburn’s office. (A copy of the agreement was not publicly available, even as lawmakers voted on it.) The amount of compensation awards would be determined by a special master, who would also be able to reduce attorney fees that he or she determines to be excessive.

Similar attorney-fee provisions had been in earlier versions of the legislation, but conservatives argued they were not strong enough. An editorial in National Review this month said the new compensation system would be a “bonanza for trial lawyers.”

Republican senators required other changes, as well. The compensation fund will end in 2016, as opposed to 2031 as supporters wanted, and it includes reporting provisions that senators say will help to reduce fraud. “I’m pleased this agreement strikes a fair balance and improves the bill the majority attempted to rush through at the last minute,” Coburn said in a statement.

Democrats evoked memories of New York firefighters and other responders as they pushed for approval of the compensation plan before lawmakers leave Washington for the year.

“People rushed in and fought those fires and brought people out and helped clean the debris,” said Senate Majority Leader Harry Reid (D-Nev.) in a news conference. “They’re the ones that we’ll never, ever forget what they did, because they have the illness to prove it.”

Several New York plaintiff firms have taken the lead in representing responders. They include Worby Groner Edelman; Napoli Bern Ripka; and Sullivan Papain Block McGrath & Cannavo.

Under the original compensation system created soon after the attacks, special master Kenneth Feinberg’s guidelines recommended attorney fees be kept under 5%. Many lawyers represented families in the system pro bono, and some may do so again.

In one high-profile exception under the original system, widow Laura Balemian, whose husband died in the World Trade Center, sued her lawyer, Thomas Troiano, when he sought a contingent fee of one-third of her award, or over $2 million.

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Comments

can someone please explain whether this fund is intended to cover individuals who would not otherwise be covered by workers' compensation. Or is it intended to also cover public employees whose on-the-job injuries are presumably compensable under the workers' compensation system?